Hedge fund TT International recently published its June 2014 DB Platinum fund performance report, and the report showed the fund managed a 0.7% increase for the month. The fund has put in not-too-impressive -3.72% performance for the first seven month of 2014.
The DB Platinum TT International fund is “a multi-asset class global macro fund, using top-down fundamental and technical views to actively allocate to alpha opportunities in Equities, FX, InterestRates and Commodities. The fund aims to make 10% net or greater per annum, with single digit volatility.”
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European equity portfolio
The TT International report notes that the European equity portfolio made a slight positive contribution in June, with equity shorts showing a solid profit. The index futures shorts were also profitable. Gross exposure grew from 90% of NAV to almost 112% by month-end, with a flat to 8% net short. The report also points out that shorts in Financials and Materials were the biggest overall contributors. Long and short positions in Energy [Total SA (ADR) (NYSE:TOT)] and Telco (OTE) also made a profit. Industrials on the short side (aircraft manufacturers, airlines) also did well, but this was offset by losses on the long side [Wartsila Oyj Abp (HEL:WRT1V)].
TT International’s portfolio repositioning
TT International analysts see possible catalysts for a correction, but it does not appear imminent. They describe their current portfolio repositioning plans below: “we are running almost no directional risk in the European L/S portfolio, but have expanded the gross as we have added stock specific ideas in a number of areas. We have increased exposure within Consumer Discretionary, adding longs in Porsche and Burberry Group plc (LON:BRBY) (OTCMKTS:BURBY), amongst others.”
The report also notes they continue to hold a modest net short position in Financials, primarily European banks. They have switched from a net short in Industrials in June, and have “moved back to a net long, buying back a number of shorts and adding new longs in Aer Lingus Group PLC (LON:AERA) and Airbus Group NV (EPA:AIR).”
Another repositioning move this month is moving from neutral to a net long in materials, dropping several short positions and adding longs in BHP Billiton Limited (ADR) (NYSE:BHP) (ASX:BHP) and Braas Monier Building Group (FRA:BMSA) (ETR:BMSA).
They added back totheir position in Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD) in Telcos this month, and returned to a long position in Utilities (Centrica PLC (LON:CNA)).
The DB Platinum fund managers have moved more funds to cash in the macro portfolio as “markets currently lack real direction and volatility is very low.”
In foreign exchange repositioning, the report noted an exit from short EUR positions, but also initiating a long CNH Global NV (NYSE:CNH) position 3 and 6 months forward given the belief the RMB will strengthen again before year-end. The report also noted a new long GBP position using calls.
The report also highlights that managers cashed in profits on long their Topix futures position in June and currently have no exposure, and finally, in Fixed Income, the fund fully exited its March 15/16 Euro$ futures position.